A UK debt clock in Westminster in 2010. 'The banks were saved by making their private debt public. Now the government is redistributing this newly public debt to households, through taxation and debt.' Photograph: Peter Macdiarmid/Getty Images

How easy would it be for someone, individually and personally, to start a revolution? Actually, for many of us, it would be easier than you might think. This is how to do it: don't buy one thing you don't really need today. Certainly, don't buy it with borrowed money. Rinse and repeat tomorrow.

I say this not from a patronising or didactic high perch, but as someone who has struggled with personal debt and continues to struggle with its aftermath, but who is also beginning to reap the fruits of this simple but difficult adjustment in attitude. I say it not through a lack of understanding that the poorest are already only spending primarily on essentials and are driven further into debt by a rigged system in which the less one has, the more everything costs. I say it precisely because I have been there and understand its long-term implications. A refusal to over-consume, choosing the generic over the branded, a rationalisation of expenses: all this is the only practical personal resistance available.

Three years ago, extracts of a speech by the British prime minister David Cameron trailed to the media read: "The only way out of a debt crisis is to deal with your debts. That means households – all of us – paying off the credit card and store card bills." In the furore that followed, economists and rival politicians accused him of ineptitude and said this was dangerous advice that would only worsen the recession. Setting aside the misconceived comparison of state to credit-card debt, the second part of that statement could have been Cameron's most profound and radical. Which is why it never issued forth from his lips. The speech was hastily changed and did not include it.

Instead, government policy has actively encouraged non-state debt – with funding-for-lending and help-to-buy schemes, through low interest rates and quantitative easing, but also by the application of austerity measures. This is one of the basic ways in which the austerity programme has worked, in the context of deficit reduction: by transferring debt from public to private via a combination of "squeezing" and credit availability. The Office for Budget Responsibility (OBR), in its latest economic outlook paper, states this plainly: "By the end of the forecast period, we expect the government's deficit to have returned to balance as the fiscal consolidation continues. The household and corporate sectors provide the majority of the offsetting change, with household net lending moving from a deficit of 1.2% of GDP in 2014 to a larger deficit of 3.7% of GDP in 2018." The exchange for the state going into balance is household finance going further into deficit.

A pre-delivery draft of David Cameron's speech to the Conservative conference appeared to exhort the public to pay off their credit card bills. Photograph: Alan Schein Photography/ Alan Schein Photography/Corbis

The Office for National Statistic's latest economic review warns that growth has been driven primarily by increased household consumption and that "in contrast to the relative strength of household spending … the contribution of net trade to GDP growth has been particularly small and quite erratic." Meanwhile, the OBR notes: "Real wages continue to fall." The gap between falling incomes and increased spending is bridged, partly by lower savings, but in great part by credit. This is essentially what is known as "consumer confidence"; the carefully nurtured irresponsibility of spending future income today.

The spending of future income right now is the yoke with which the working and middle classes are subjugated. This is neither a new nor a particularly socialist concept. More than 2,000 years ago aphorist Publilius Syrus expressed precisely the same idea: "Debt is the slavery of the free", as did the Bible: "The rich rules over the poor and the borrower is the slave of the lender". The Money Charity estimates that £161m is the daily amount of interest paid on personal debt in the UK. Buying with ready money rather than credit is one of the key reasons the rich get richer, while the poor get poorer. Interest is one of the most blatant means by which wealthy institutions and individuals extract money from those less well-off. We complain about bankers' bonuses, while making minimum payments on a 17% APR credit card. This hubris is enshrined in the credit-rating system, which will rate someone with no debt lower than someone of equivalent income who has piles of debt but makes the payments regularly. The indebted, but diligent person, is more valuable to the lending industry.

Debt is both a product of and a reason for inequality; it is a self-amplifying feedback loop that affects the poor disproportionately. As Gavin Kelly observed in the Financial Times, the problem with debt is "a distributional one. The sceptics are right to say that looking at total debt figures in isolation is not sensible. But what does matter is the distribution of the debt burden relative to household incomes." A sixth of personal debt is held by households with less than £200 to spare after spending on essentials. A rise in interest rates could have a disastrous effect. The Resolution Foundation estimates that as many as two million households in the UK could be in "debt peril" come 2018.

Economist Robert Parenteau looked at this equation, prophetically, in the US just before the crisis. He found that the continual deficit spending by households, while borrowing against the equity of assets, was akin to a Ponzi scheme. He concluded that "an explosive household debt-to-income trajectory can be sustained only by an equally explosive asset price appreciation that lifts asset prices far from fundamentals." The UK seems to be sleepwalking into the very same trap by stoking the housing bubble. Detractors will point out that reduced consumer spending will lead to recession, loss of jobs, even economic depression. There is some truth in all those predictions. But what is the alternative? The perpetual growth of a grotesquely inequitable economy only benefits an increasingly small group of individuals. There are an ever-higher number of "losers" for every "winner". Very few would argue with advising consolidation and thrift to an individual trying to bring debt under control. And yet, if too many people adopted this sensible approach, the warning is that our economy would collapse. This reveals something very brittle at the heart of the recovery. It says: "we should all be sensible, but not all at once".

We know that economic upturns based on credit bubbles soon turn to busts, yet we plough on. The alternative of refusing to participate in a faux-recovery, by refusing credit at the personal level, might be traumatic in the short term, but may also bring far-reaching benefits at the state level – a rebalancing of the economy towards producing more of the things we need; a pressure on governments (who can borrow at much lower rates) to pick up the slack by investing in income producing or enhancing infrastructure which will pay for itself and create jobs; a smoothing of wage inequalities due to a realisation at the top that people are starting to refuse to spend what they don't have.

Finally, we may begin to look at "growth" within the vital context of irreparable environmental damage and dwindling natural resources. For how long can we really put off the inevitable and unyielding reality that increasing consumption ad infinitum is simply impossible?

The point, therefore, is not that reducing debt or eschewing it altogether is easy, but that it is necessary. Like breaking any addiction, it involves a period of withdrawal and difficult adjustment. It represents a temporary drop in traditionally defined living standards, in exchange for a more equitable and sustainable future – a concept that our grandparents' generation embraced, as they endured rationing but also produced the NHS, social housing and social security.

'A fairly average car costs £427 a month to run - much more if purchased on credit' Photograph: Travelpix Ltd/Getty Images

Central to achieving this change of direction at the state level, is a change within our personal sphere. For instance, clarity about our individual purchasing decisions; distinguishing true assets as opposed to liabilities disguised as assets. A fairly average car costs £427 a month to run – much more if purchased on credit. Is a car an asset? A return to fixing rather than replacing – repair cafes are popping up across Europe – and "Buy Nothing New" initiatives are part of the solution, too. We must also begin to understand the role of advertising in creating a "lack" within us, which means we will pay irrationally high amounts of money for things which don't have commensurate quality and ultimately make us unhappy. A study published today found that many overspend through lack of self-control and fear of appearing stingy or poor.

The crisis simplified is this: The banks were saved by making their private debt public. Now the government is redistributing this newly public debt to households, through taxation and debt. Many of us have the capacity to resist this final step, to refuse to participate in a recovery which only benefits the few: a harsh and rational assessment of what we need as distinct from what we want; a culture of delayed gratification. By our individual actions we can force the state to find alternative collective solutions.